Obama extends 10% cap on loan repayment

Using an executive order, President Obama extended generous income-based repayment terms to an estimated five million more student loan debtors. People with student loans will be able to limit payments to 10 percent of their discretionary incomes. Loans will be forgiven in 20 years — or 10 years if they take public-service (government) jobs.

The big winners are people who borrowed for graduate school and private colleges, which can keep raising tuition without fear of scaring away students.

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Comments

  1. Miller Smith says:

    Uh…by lowering the payments to no more than 10% of income I wonder if everyone realizes that the term of the loans extend for decades longer with total payments being many many more times than the borrowed amounts?

    • Stacy in NJ says:

      After 20 years the remaining amount is forgiven and the rest paid by the US taxpayer. It’s 10 years if the individual works for the feds. Nice racket.

      • Miller Smith says:

        WOW! After 20 years the rest is forgiven? Then there is no reason not to borrow a ton of $$$ and then get on the 10% plan. Heck, $100,000 in loans on a $45,000 salary gets a big break of almost half the borrowed amount after 20 years.

  2. All hail King Obama! Constitution be damned!

    I’d love to see a comic book where James Madison is resurrected from the grave as a super hero and “explains” the constitution to modern day folk.

  3. Miller Smith says:

    He can break contracts because he has a phone and he has a pen!